CBK Seeks Ksh.40 Billion in Domestic Market for Budgetary Support

The Central Bank of Kenya (CBK) has put on auction a Ksh.40 billion bond in the domestic market.

It is a 1.4-year paper which will be used for budgetary support.

Investors have until April 17, 2024, to submit bids which have been priced at a 15% interest rate.

The coupon rate has been set at 16.9% and the bond qualifies for the statutory liquidity requirement ratio for commercial banks and Non-bank financial institutions.

The bond might be re-opened at a future date.

Treasury bond bids must be submitted via CBK DhowCSD or Treasury Mobile Direct by April 17 at 10 am.

Previous Bond Performance

On March 22, CBK released the auction results for the re-opened bond FXD1/2023/005 with a tenor to maturity of 4.4 years.

Also Read: CBK Rejects Ksh.37 Billion From Investors After Bond Sale

It had a coupon rate of 16.8% and the new FXD1/2024/010 with a tenor to maturity of 10.0 years, and a fixed coupon rate of 16.0%.

The bonds were oversubscribed with the overall subscription rate coming in at 149.3%, receiving bids worth Ksh.59.7 billion.

More Than Ksh.30 Billion Investor Bids Rejected

This was against the offered Ksh.40 billion and CBK accepted bids worth Ksh.22.6 billion, translating to an acceptance rate of 37.8%.

The weighted average yield of accepted bids for the FXD1/2023/005 and the FXD1/2024/010 came in at 18.4% and 16.5% respectively.

With the Inflation rate at 6.3% as of February 2024, the real return of the FXD1/2023/005 and the FXD1/2024/010 is 12.1% and 10.2% respectively.

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Lawrence Baraza

Lawrence Baraza is a dynamic journalist currently overseeing content at Metropol TV Digital. With a keen focus on business news and analytics, Lawrence guides the platform in delivering insightful, data-driven content that empowers its audience to make informed decisions. Lawrence’s commitment to quality and his ability to anticipate market trends make him a key figure in the digital media landscape. His work continues to shape the way business news is consumed, making a significant impact in the field.

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